Gold Miners Have Had a Golden Cross
The Market Vectors Gold Miners ETF has one of the most interesting charts in the market.
Notice the steady decline from last summer, followed by a bump in the spring. It then gave back almost all those gains but still managed to drag the 50-day simple moving average (SMA) above the 200-day SMA.
That results in a strange situation with both SMAs falling – yet still in a bullish sequence.
Next, the recent drop erased most but not all the earlier bounce. It has managed to register a higher low (notice the weekly chart below).
Third, MACD has turned positive in the last few sessions.
Finally, stochastics on the weekly chart show an oversold condition:
The other catalyst could be the Federal Reserve because Jerome Powell was more dovish than expected yesterday. The U.S. dollar has trended upward lately, but in March GDX turned higher about two weeks before the greenback rolled over. So we could be at a start of a new pattern, with a dovish Fed lifting precious metals and dragging on the dollar.
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Notice the steady decline from last summer, followed by a bump in the spring. It then gave back almost all those gains but still managed to drag the 50-day simple moving average (SMA) above the 200-day SMA.
That results in a strange situation with both SMAs falling – yet still in a bullish sequence.
Next, the recent drop erased most but not all the earlier bounce. It has managed to register a higher low (notice the weekly chart below).
Third, MACD has turned positive in the last few sessions.
Finally, stochastics on the weekly chart show an oversold condition:
The other catalyst could be the Federal Reserve because Jerome Powell was more dovish than expected yesterday. The U.S. dollar has trended upward lately, but in March GDX turned higher about two weeks before the greenback rolled over. So we could be at a start of a new pattern, with a dovish Fed lifting precious metals and dragging on the dollar.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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